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Modernize: To Be or Not to Be

A couple of years ago, I felt the growing issues I had with my 10+-year-old house getting out of control. When it was constructed many years ago, my specifications were quite different.Then, I didn’t have any placeholder for a new room. Now with the arrival of my daughter, I feel she needs her own room or a place to play without a care in the world. That’s when I realized that my house needed a massive makeover and met an architect to discuss plans for modernizing our 12-year-old abode!

I had minimal first-hand information to provide the specifications. I only remember my dad telling me about the unique style of brick being used at the time. When I mentioned this to the architect, he promptly suggested I get in touch with the specialized professionals. After research, I learned that such skills are rare and that there were very few skilled resources who could support my request. Bringing down the wall required a huge investment along with the added difficulty of skilled resources. I knew I had to fix it someday, but after foreseeing these issues with my other commitments and priorities, I decided that renovation could wait for a few years.

Well, if this came up in the matter of a small house, consider an enterprise –a large Bank/Insurance/Retailer facing similar issues with the added issue of stiff competition. Modernizing is a continuous process in every field. Over time, applications lose their alignment with your business organization’s requirements, putting business at competitive risk. Hence, making a judicious call on when to modernize becomes very important. Imagine these businesses with hundreds of business-critical applications and complex code without proper understanding and limited skilled resources. Just as I did a simple analysis on how many specialized architects currently exist to renovate my house, I tried applying a similar analysis to Enterprise companies.

Legacy – Who Uses It?

There's a simple rule of thumb to determine who has employed legacy applications. If an organization existed 30 years ago and had enough money that time to invest in computers, then it most likely has used legacy technology. If a company was launched in the last 20 years, it may have used a simple client server-based application/4GL without COBOL. So I wanted to find out how these Fortune companies are spread across, mainly Banking, Insurance and Retail -- the top industries that existed even before the 80s and had higher inclination towards technology. These industries make 40-50% of the industry population, which mostly possessed Mainframe and its siblings OR a client server based application.

Dayton Semerjian, GM for Mainframes at CA Technologies, notes that 80% of the Fortune 500 companies still use legacy technologies. So now we know that legacy code exists in 80% of the Fortune 500 companies.

‘OTHERS’ in the below diagram includes Airlines, Logistics, Cable, communication, Hospitals, Power, Rental, Entertainment, Automobile etc. The chart is obtained based on segregating the companies into various industry buckets.

More on Mainframe’s significant presence will be covered in the next post.